Lotte Group, one of South Korea’s major conglomerates, has filed a police complaint seeking punitive action against individuals accused of fabricating and spreading false rumors, including claims of a looming moratorium due to a liquidity crisis, which the company asserts have tarnished its reputation.
Lotte Holdings announced on Dec. 2 that it had requested the Seoul Gangnam Police Station to investigate and charge those involved under allegations of credit defamation. The move follows the release of two YouTube videos on Nov. 16 with titles suggesting that “Lotte Group is at risk of disintegration.” A summary of the claims began circulating the following day through private messaging channels.
The videos reportedly compiled excerpts from various media reports concerning Lotte subsidiaries, citing dozens of articles. Based on this content, additional rumors spread via private messages alleging that Lotte planned to declare a debt moratorium in early December. Other claims included reports of severe financial troubles for Lotte Engineering & Construction, citing unsold properties, difficulties clearing debts despite planned real estate sales, and speculation of layoffs affecting over 50% of its workforce.
The group swiftly refuted these allegations on Nov. 18, the day after the messages gained traction, labeling them “groundless.” The company also began legal consultations to address the matter and hold those responsible accountable. Following these reviews, Lotte concluded that the false claims had caused its affiliate companies’ stock prices to plunge, stirred unease in financial and securities markets, and significantly damaged the group’s credibility. This prompted the decision to file a formal complaint.
Under South Korean law, disseminating false information or employing deceptive means to damage an entity’s “credit” is punishable by up to five years in prison or a fine of up to 15 million won (about $10,600). Unlike defamation laws, which protect personal reputation, credit defamation laws focus on the harm caused to an entity’s financial reliability, ability to meet obligations, or perceived intentions.
